Faulty tank ammo caused Rs 687 crore loss to Govt

More than Rs 408 crore worth of tank-fired ammunition - 1,02,014 rounds - that made its way into army depots in 2009-10 were found to be faulty, much before completing the prescribed shelf life of 10 years, a latest CAG report has revealed.

While no thorough investigation and analysis was conducted to find out why and how this took place, to meet the army's shortfall, ammunition worth Rs 279 crore (16,000 rounds) had to be imported from Rosoboronexport, a Russian company.

As a result, the losses to the public exchequer due to unserviceable ammo and consequent imports totalled Rs 687 crore.

In 2010, a task force exploring the possibility of rectifying the faulty consignment had opined that the ammo was beyond repair.

While the Army attributed the defects to insufficient quality control during manufacture, the ordnance factory that produced the ammunition attributed the 'faults' to design deficiencies, a charge denied by the Defence Research and Development Organisation (DRDO), the indigenous designers of the ammunition.

While the Army accepts ammunition only after appropriate quality assurance tests at various levels, any defect noticed during periodic test firing or otherwise during storage, is required to be thoroughly investigated, responsibility fixed and loss statements prepared for writing off the value of defective ammunition.

From 1997-2005, the Army had received about 3.5 lakh rounds of this ammunition valued at about Rs 1400 crore.

"Contrary to the prescribed procedure, no serious investigation was concluded to ascertain the reasons for defects in the ammunition and to fix responsibility for such failure," the CAG report said.

In another finding in the CAG report, intervention by audit led to a saving of about Rs 169 crore that would have been spent on 5.56mm bullets for INSAS rifles and .22 Rim Fire Tracer bullets, despite the defence ministry holding surplus stocks of such ammunition.

Recommending strengthening of internal controls in the ministry to ensure that procurement decisions are made based on available stock positions, CAG said, "The episode of placing of indent and obtaining approval for import when surplus stock of ammunition existed reveals deficiencies in monitoring inventory levels at ammunition depots."